Managerial tools used to meet or beat analyst forecasts: evidence from the UK
journal contributionposted on 2020-07-08, 08:29 authored by Yousuf Khamis Al Mabsali, Robert Hayward, Yasser EliwaYasser Eliwa
This paper examines the tools that managers use to meet or beat analyst forecasts in the post-International Financial Reporting Standards (IFRS) period, using a sample of UK firms for the period 2005 to 2015. Our results are consistent with the view that managers utilize both classification shifting and managerial guidance to hit analyst forecasts. The results suggest that managers are more likely to continue to exercise their discretion in using these two tools following the adoption of IFRS. This paper supports the argument that managers engage in classification shifting, and IFRS adoption is more likely to increase market demand for more disclosures through managerial guidance. In contrast, there is weak evidence to suggest that real earnings management or accrual earnings management are used to hit analyst forecasts. Our results are expected to be of interest to policymakers, regulators, and external auditors.
- Business and Economics
Published inJournal of International Accounting, Auditing and Taxation
- AM (Accepted Manuscript)
Rights holder© Elsevier
Publisher statementThis paper was accepted for publication in the journal Journal of International Accounting, Auditing and Taxation and the definitive published version is available at https://doi.org/10.1016/j.intaccaudtax.2021.100383.